Displaying items by tag: advisors

(New York)

2020 was a rollercoaster of a year and not just in financial markets. It was quite a wild year in recruiting as well. When the pandemic hit, advisor movement dropped off to a trickle, but in the summer it started to come back and was roaring in the second half of the year. 2021 seems like it will be much the same. Both large IBDs and RIAs are looking to increase recruiting efforts, and offer packages for jumping ship have been getting larger. Commonwealth, for instance is planning a major recruiting push this year, which builds on other big efforts from Fidelity and LPL.


FINSUM: This definitely feels like an advisor’s market for moves. Firms are hungry to recruit and advisors seem to have the upper hand in negotiations.

Published in Wealth Management

(Washington)

Sneaking in right after Christmas and just before a change of administration, the SEC has announced an important rule change that affects all advisors. In particular, the SEC has updated a rule that has not been touched in decades and was increasingly out of touch with reality. The change has to do with marketing communications, particularly those through internet channels. According to Barron’s, “The new regulation also allows financial advisors to use testimonials, endorsements, and third-party ratings to woo potential clients, as long as they meet certain conditions”. SEC chief Jay Clayton commented that “The marketing rule reflects important updates to the traditional advertising and solicitation regimes, which have not been amended for decades, despite our evolving financial markets and technology. This comprehensive framework for regulating advisers’ marketing communications recognizes the increasing use of electronic media and mobile communications and will serve to improve the quality of information available to investors”.


FINSUM: Advisors have had to tread very lightly in digital communications/advertising for years because of a high degree of uncertainty about what was permissible. This goes a long way towards making that very clear.

Published in Wealth Management

(New York)

When the pandemic first hit, recruiting slowed down, with less advisors moving firms. However, after a couple of months, things started to pick up. According to a TD Ameritrade survey, 40% of advisors now say they are more likely to move than they were before the pandemic. Only 15% say they are less likely. If one comment sums up the increased velocity of recruiting, it might be this, “Advisors are at home and working in an independent environment. That can cause them to question what they are paying for at their firm. ‘Do I need the overhead and management of the wirehouse? Am I doing alright without it now?”.


FINSUM: On top of the questioning of whether all the overheads associated with a wirehouse make sense when they are working from home, the other big thing driving moves is the simple fact that it is easier for recruiters to reach advisors when they aren’t in the office. This makes the whole courting and exploration period much simpler.

Published in Wealth Management

(New York)

A new survey by the Money Management Institute and AON has come up with some interesting findings as it relates to client satisfaction with their advisors. One of the most intriguing findings was that clients say they wished their advisors used more goals-based financial planning. Goals-based planning is the idea that you plan around clients’ individual life goals (e.g. saving enough money to pay for children’s college) and then continually report to clients how they are doing in those areas. Incorporating values into their financial planning is another area where clients say advisors could improve.


FINSUM: Many advisors already do this, but there is likely room for improvement, especially as it relates to reporting. Very few invest and save just for the sake of accumulation without a plan for their money, so reporting on the key areas they are making progress towards is a good step. There are even funds that specialize in helping aid goals-based investing.

Published in Wealth Management

(New York)

The wealth management industry has a long-standing issue that has recently been re-highlighted by some new research studies. That issue is that financial advisors—who are overwhelmingly male—tend to have unconscious biases which lead to miscommunication, poor judgments, and bad experiences for female clients. According to Merrill Lynch, one of the big changes in household investing is the increasing involvement of women. For instance, women under 45 are twice as likely as average to be the financial decision maker in their home, and 4.5x more likely than women over 55 to consider themselves knowledgeable about investing. In meetings with heterosexual couples, advisors are still focusing most of their attention on men, which is frustrating to women. Male advisors also often mistakenly assume the couple’s finances are integrated and they are investing from the same account.


FINSUM: It is no surprise that the issues exist in wealth management, as they seem to be present in all industries. Our sector seems pre-disposed to the issue given the overwhelming majority of older male advisors.

Published in Wealth Management
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